answer%20of%20ch12[1] - 12-29(4045 min.)Target prices,...

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Unformatted text preview: 12-29(4045 min.)Target prices, target costs, value engineering, cost incurrence, locked-in cost, activity-based costing.1.Old BE200Cost ChangeNew BE200Direct materials costsDirect manufacturing labor costsMachining costsTesting costsRework costsOrdering costsEngineering costsTotal manufacturing costs$198,00041,00043,50060,00020,0005,20037,140$404,840$2.4 8,000 = $19,200 less$0.75 8,000 = $6,000 lessUnchanged because capacity same(20% 3 8,000) $2.5 = $12,000 (See Note 1)(See Note 2)Unchanged because capacity same$178,80035,00043,50048,0008,0003,12037,140$353,560Note 1: 10% of old BE200s are reworked. That is, 800 (10% of 8,000) CE100s made are reworked. Rework costs = $25 per unit reworked 800 = $20,000. If rework falls to 4% of New BE200s manufactured, 320 (4% of 8,000) New CE100s manufactured will require rework. Rework costs = $25 per unit 320= $8000.Note 2 : Ordering costs for New BE200 = 2 orders/month 60 components $26/order= $2,100Unit manufacturing costs of New BE200 = $353,560 8,000 = $44.195Unit manufacturing costs of New BE200 = $353,560 8,000 = $44....
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answer%20of%20ch12[1] - 12-29(4045 min.)Target prices,...

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